Higher US Sales Push Dunkin' Profit up 36 Percent

Dunkin' Brands Group Inc. reported a better-than-expected quarterly profit, helped by a rise in sales at its Dunkin' Donuts chain in the United States, its largest market.

Sales at established Dunkin' Donuts franchisees in the United States rose 2 percent in the third quarter ended Sept. 27, helped by growing sales of beverages and add-ons like hash browns and breakfast sandwiches.

Analysts polled by Consensus Metrix had expected a 2.3 percent rise for those stores in the same period.

Overall U.S Dunkin' Donuts sales rose 6.5 percent, helped by an increase in the number of outlets and higher royalty fees from the renewal of contracts with existing franchisees.

U.S. Dunkin' Donuts shops account for roughly three-quarters of the company's total revenue.

The company, which also owns the Baskin-Robbins ice cream chain, said achieving the low-end of the 2014 U.S. comparable store sales growth target of 2-3 percent for its Dunkin' Donuts business would be a challenge due to growing competition and "ongoing challenges with the economy".

The Canton, Massachusetts-based company cut its 2014 outlook in July as its doughnut shops battled increased competition from fast-food rivals such as McDonald's Corp and high milk prices ate into profits in its Baskin-Robbins business.

McDonald's, Dunkin's top rival in the United States, said earlier this week sales at restaurants open at least 13 months, fell 3.3 percent in the domestic market.